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Tax relief on Venture Capital Trust investments

VCT (Venture Capital Trust) is a type of investment fund that invests in small and medium-sized companies that are not listed on the stock market. In the UK, VCTs are regulated by HM Revenue and Customs (HMRC) and offer tax relief to investors.

Investors in VCTs can claim income tax relief of up to 30% for up to £200,000 annual investment, provided they hold the shares for a minimum of five years.

In addition to income tax relief, VCTs also offer the following tax benefits:

No tax on dividends:

–         Dividends received from VCTs are tax-free.

No capital gains tax:

–         Any gains made on the sale of VCT shares are exempt from capital gains tax.

No inheritance tax:

–         VCT shares can be passed on to heirs free from inheritance tax after two years of ownership.

 

It’s important to note that VCTs are high-risk investments and are not suitable for everyone. It’s important to seek professional advice before investing in a VCT to ensure that it is appropriate for your financial situation and investment objectives.

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